PERTH (miningweekly.com) – Land-holders in New South Wales who allow the mining of coal seam gas (CSG)  should be compensated, the New South Wales Independent Pricing and Regulatory Tribunal (IPART) said this week.

As part of the New South Wales gas plan, the state government assigned IPART to develop a framework for setting benchmark compensation rates as a guide for land-holders negotiating land access agreements with CSG companies.

The review was looking solely at compensation benchmarks to be used as a guide for negotiations between land-holders and gas companies. The granting of licences, environmental controls, extraction techniques and the impact of gas development on local communities fell outside the scope of IPART’s review.

IPART chairperson Dr Peter Boxall said that, rather than adopting a one-size-fits-all approach to land-holder compensation, the tribunal was proposing a bespoke model that allows land-holders to estimate compensation benchmarks using information that is specific to their circumstances.

“Stakeholder feedback and our assessment of arrangements in other jurisdictions have shown that the appropriate level of compensation depends on the individual circumstances of the land-holder and the proposed activities of the gas company – both of which are highly variable and site-specific,” he added.

“As such, rather than setting dollar benchmarks, we are proposing a model that assists land-holders to assess an offer of compensation made by a gas company in relation to their own circumstances, supplemented with professional advice as required.

“Land-holders are in the best position to determine what compensation is appropriate for them, but the model would provide a guide to assist in their negotiations with gas companies.”

In addition to the benchmark model, IPART’s draft report into land-holder benchmark compensation rates also recommended additional measures to support land-holders in negotiating appropriate land access and compensation agreements, including broadening legislative provisions to ensure land-holder compensation in New South Wales was at least as good as elsewhere in Australia.

The report also suggested funding negotiation workshops to provide land-holders with independent, practical advice on approaching land access agreements and establishing and maintaining a voluntary public register of compensation payments to improve transparency of dealings with the gas industry.

Feedback was also being sought on a draft recommendation that benefit or incentive payments to land-holders should be funded by gas companies as part of their compensation arrangements.

“Stakeholders had different views about whether compensation should be paid to neighbours,” Boxall said. 

“Since we released our Issues Paper in April, the New South Wales government has released details about its community benefits fund, which is to provide benefits to neighbours and broader communities in which the gas industry operates.

“Our draft recommendation is that while any potentially impacted neighbours should be identified, compensation should only be required if there is agreement that impacts such as noise or operating hours may exceed reasonable levels set out in environmental or planning approvals.”


Greens group Lock the Gate Alliance has said the New South Wales government was putting the cart before the horse by implementing a compensation regime for the impacts of CSG on land-holders before comprehensive regulatory protections are in place and before the Chief Scientist’s recommendations have been fully implemented.

“The New South Wales government has talked about needing better protection for land-holders and farmers against CSG but it has come up short on action,” said Lock the Gate spokesperson Phil Laird.

“Compensation benchmarks for farmers and land-holders should only be set once the right laws and planning processes are in place that protect water, land and communities from CSG exploration and production.

“Until these proper checks and balances are in place, compensation requirements are unknown and premature discussion of compensation continues the disturbing trend of expansion by the gas industry ahead of appropriate regulation, then trying to fix it up afterward.”

The IPART report was open for public comment until October 30.